In 2001, Microsoft was making a big noise about entering the automotive sector after launching its Carview system and spoke about extending its influence into dealerships’ IT systems. Then it all went quiet.

However, the company continued to work behind the scenes on other projects with the big American dealer management systems providers ADP and Reynolds & Reynolds.

It has now formed partnerships with UK companies like Ebbon Dacs and Pinewood, providing accountancy, purchasing and payroll software that underpins their internet-based dealer management systems.

“Before we go to a new market we take time to understand it first and where it fits in with our technology,” says John Reed, Microsoft director of automotive retail solutions. “Then we look for the key partners to develop solutions.”

Microsoft has undertaken a lot of research in America to identify the future for dealer management systems – the functions that will benefit dealers and their customers. Its study has thrown up some interesting, and controversial, conclusions.

“Our feedback revealed key trends that are causing a need to re-evaluate technology in the dealership: for example to improve the sales and aftersales process through personalisation,” says Reed.

“This includes vehicle identification when it enters the dealership via the number plate, which enables staff to look at the service history before the customer gets to reception. It’s not ground breaking, but in the dealer industry this level of personalisation is missing because it is difficult to configure the DMS.”

Reed believes full interaction and personalisation via the DMS is “five to seven years away” in the UK. The automotive sector is lagging behind other industries in terms of use of information technology.

“It’s in its infancy, but it is at the start of a transition,” Reed adds.

Among the functions he predicts will become commonplace are communication by customers’ preferred method (phone, fax, text, email) and integration of the aftersales and service process via on-board communications and real-time diagnostics, which will report problems to the dealer and consumer simultaneously via email.

“Both will be alerted and it will give the consumer the option of scheduling a service with the dealer – either the closest one to their current location or a preferred dealer,” says Reed.

If a service is scheduled, confirmation will come up on the in-car communications screen. The customer will also get a reminder closer to the appointment and directions to the dealership. Then, when the car enters the showroom, recognition software will link it to the DMS.

#AM_ART_SPLIT# Remote access and personalisation are the two key developments for the future, according to Reed, driven by consumer demands.

He believes that this will be facilitated by dealer management systems that are powered via the internet. Systems that do not have the functionality will struggle to adapt.

“Older products, typically those with the architecture 10 years plus, are designed in such a way that makes access to data and personalisation difficult,” he says. “That’s why Microsoft is working with Ebbon Dacs and Pinewood with their internet-linked systems.”

The next generation DMS will link dealers with the customer, car, manufacturer, aftermarket supplier, F&I provider, auction house and other retailers in a group. They will offer a broader range of functions on a modular basis, including greater emphasis on front office tasks like sales and aftersales rather than focusing on back office facilities.

Reed believes UK dealers need to consider the DMS itself, and solutions that integrate with the DMS.

“For some dealers, switching their DMS is not practical, so they need add-ons that augment their existing system,” he says. “Our relationship is around helping to provide the best DMS solutions to dealers looking for a DMS replacement.”

DMS partners use different parts of the Microsoft application, which include accountancy, purchasing and payroll. It enables suppliers to focus on the front office developments while Microsoft takes care of the back office functions.

DMS developments present dealers with two opportunities, adds Reed. “First, to be more precise on sales opportunities and revenue after the car has been purchased by accurately targeting and offering a broader set of services that yield better margins.

“Second, by reducing cost on marketing by moving away from newspaper ads to the internet.”

With consumers demanding greater personalisation, Microsoft and Reed are convinced that dealer management systems are at the cusp of a revolution. Progress will quicken and retailers and consumers will both benefit.